If You Liked NAFTA, You’re Going to Love CAFTA

by David Macaray / August 2nd, 2010

Last week Gabriela Lemus (Senior Advisor and Director, Office of Public Engagement, U.S. Department of Labor) announced that the U.S had made a request for “formal consultations” with the Guatemalan government to address enforcement of labor laws pursuant to the CAFTA-DR (Dominican Republic-Central American Free Trade Agreement) economic alliance.

Besides the obvious humanitarian concerns, the problem with Guatemalan laws going unenforced is that it places other North and Central American workers in the unfair position of trying to compete with a country that selfishly exploits substandard labor practices.

For example, as meager as Guatemala’s minimum wage is, more than 40-percent of its workforce earns less than the federal minimum. And even though their own courts have ruled that CAFTA provisions are being violated, the government has refused to budge. Their unwillingness to respond is what prompted the Department of Labor (DOL) to act.

Another issue is the rising level of labor-related violence. Not only are union activists being openly intimidated and threatened, but labor leaders (organizers, negotiators, local officers, etc.) are being murdered. In 2009, the ITUC (International Trade Union Confederation) named Guatemala the second-most dangerous country for trade unionists. Colombia was first.

In April of 2008, six Guatemalan labor unions (along with our own AFL-CIO), formally filed what is called a “public submission,” charging the Guatemalan Ministry of Labor with ignoring labor practices clearly laid out under CAFTA, and for failing to follow through on investigations of employee complaints.

While it’s unfair to criticize a process that hasn’t even begun, it’s hard to envision significant changes being made by a government as unresponsive as Guatemala. That the U.S. expects these “consultations” to result in substantive improvements seems as wildly optimistic as taxpayers expecting a sternly worded letter addressed to Wall Street to result in less greed.

Going after the Guatemalan government isn’t the way to do it. If their own judges can’t get them to play ball, what can a display of saber-rattling from Uncle Sam’s trade representatives accomplish? There’s a better way. Because the majority of Guatemalan manufactured goods are earmarked for the U.S., the DOL should go after Guatemala’s customers.

When it comes to acknowledging inferior labor conditions in Asia and Latin America, U.S. corporations (Coca-Cola, Nike, et al.) are renowned for hiding behind a vale of ignorance. Their headquarters are thousands of miles away; their executives don’t speak the language, they have little day-to-day influence, they rely on other people’s reports, etc.

And when violations are exposed, these companies glibly profess that they had no idea employees were being exploited or that union organizers were being intimidated or killed. It’s a lie, of course, a classic case of playing dumb to avoid implication, but it’s one that has worked for decades. What the DOL needs to do is anticipate this tactic and go directly to Plan B.

Plan B should consist of hitting these corporations with everything they have. Subpoena them, prosecute them, sue them, harass them, clobber them with every hammer in their arsenal. The DOL is an arm of the U.S. government, an agency with more than 17,000 employees and an annual budget of more than $100 billion. Clearly, it has the muscle to enact changes.

Given that these countries are signatories to CAFTA, the DOL should join with the Department of Justice and declare war on illicit labor practices—declare war on Latin American labor violations the same way the U.S. government declared war on drugs. Like the drug war, they should confiscate property and freeze the bank accounts of companies who accept merchandise from vendors identified as labor violators.

But unlike the war on drugs, which failed because the dope market is illegal and underground, the war on substandard labor has a chance of succeeding because imports are carefully monitored and regulated. Make no mistake: An American apparel company that’s had its shipments embargoed and its assets frozen will be highly motivated to ensure that Guatemalan labor laws are obeyed.

So the question becomes: How serious is the DOL? Is it serious enough to fix what needs fixing, even if drastic measures are required? Or is it playing that same old bureaucratic game—spouting noble-sounding rhetoric, but expecting little to improve?